Michael Dell, CEO of Dell Computer
After losing a lawsuit to the Dodge brothers in 1918, Henry Ford, irate that a court and a few shareholders could interfere with the management of his company, determined to buy out all the shareholders. Ford said that if he was not master of his own company, he would start another. The ruse worked; by July 1919 Ford had bought out all seven minority stockholders. Ford Motor Company was reorganized under a Delaware charter in 1920 with all shares held by Ford and other family members. Never had one man controlled so completely a business enterprise so gigantic.
While not quite the extraordinary soap opera of Henry Ford’s 1919 lawsuit with the Dodge brothers, and Ford’s subsequent ruse that by 1920 succeeded in giving Ford total control of all Ford Motor Company shares, Michael Dell is apparently on the verge of announcing the privatization of Dell Computer. Adding to this major development in the PC industry, Microsoft is rumored to be participating in the privatization of Dell.
Microsoft is rumored to be involved in the privatization of Dell
Perhaps Dell’s move to privatize his company is shrewd strategy in a difficult market situation, and not the eccentric machinations of a Henry Ford. Virtually all of the industry analysis firms are reporting dramatic falloffs in the sales of PC’s at the expense of the meteoric rise of tablet and smartphone sales. Microsoft’s apparent involvement in this suggests something akin to Google’s acquisition of Motorola Mobility. However, in this case, Dell would need to morph very quickly into a smartphone, tablet manufacturer, which would be no mean feat, by any measure. All in all, it is a milestone in the corporate life cycle of the PC industry as a whole, and while the writing seems to be on the wall, it could take many years for the likely end to play itself out.
Best Buy Announces Closure of Nearly New West Kelowna Store
Another much more recent privatization scenario in the face of market reverses, is that of Best Buy. Yesterday, Best Buy announced the closure of fifteen stores in Canada alone, 7 Best Buy stores, and 8 Future Shop locations. The West Kelowna Future Shop, opened only a year ago is one of the stores to close. Best Buy is trapped in the demise of the Big Box store business model. Increasingly, customers are using Best Buy and Future Shop for “showrooming,” then buying their item online. There seems to be no easy solution to this problem, and so far management has offered only extremely lame solutions, which has added to shareholder anxiety. Fast Company journalist Richard Brier offered his own scathing excoriation of Best Buy’s management and its brain dead strategy in the August 23, 2012 issue…The infographic from the article is shown here:
Fast Company article: What Every CEO Can Learn from Best Buy’s (continued) Branding Mistakes
So, in yet another odd and tragic scenario, Richard Schulze, founder of Best Buy, is engaged in more of a soap opera like battle with the current Best Buy Board of Directors and management, to buy back the company, complaining that he alone is best suited to run it….
Now doesn’t that sound like Henry Ford?